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The influence of different forms of government spending on distribution and growth

Listed author(s):
  • Commendatore, Pasquale
  • Panico, Carlo
  • Pinto, Antonio

This paper deals with the influence of different types of government expenditure on growth. It widens that proposed by the literature which follows the lines set by Barro (1990) because it adds the changes working through the demand side, generated by the variations in the distribution of the net income of the economy, to those working through the supply side, generated by the variations in factor productivity. The analysis considers a government sector with a balanced budget and an autonomous and nonlinear investment function, interpreted along a Kaleckian and a Classical-Harrodian line. It shows under which conditions different types of government expenditure are beneficial or detrimental for economic growth, comparing some results with those reached by Barro (1990) and points out the emergence of phenomena like multiple equilibria, hysteresis and low growth traps.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15364.

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Date of creation: 02 May 2009
Handle: RePEc:pra:mprapa:15364
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  1. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
  2. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-393, December.
  3. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
  4. Dutt, Amitava Krishna, 1992. "Conflict inflation, distribution, cyclical accumulation and crises," European Journal of Political Economy, Elsevier, vol. 8(4), pages 579-597, December.
  5. Pasquale Commendatore & Carlo Panico & Antonio Pinto, 2005. "Government debt, growth and inequality in income distibution: a post-Keynesian analysis," Chapters,in: Innovation, Unemployment and Policy in the Theories of Growth and Distribution, chapter 11 Edward Elgar Publishing.
  6. Pasquale Commendatore & Carlo Panico & Antonio Pinto, 2010. "Government Spending, Effective Demand, Distribution and Growth: A Dynamic Analysis," Chapters,in: Institutional and Social Dynamics of Growth and Distribution, chapter 6 Edward Elgar Publishing.
  7. Gang Gong, 2001. "Product Innovation and Irregular Growth Cycles with Excess Capacity," Metroeconomica, Wiley Blackwell, vol. 52(4), pages 428-448, November.
  8. Giorgio Rodano & Gian Italo Bischi & Enrico Saltari & Roberto Dieci, 2001. "Multiple attractors and global bifurcations in a Kaldor-type business cycle model," Journal of Evolutionary Economics, Springer, vol. 11(5), pages 527-554.
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